Bank-owned foreclosures refer to those that have reverted to bank ownership after a public sale. These properties can range from single units to multi-family units, condominiums, apartments, townhouses, duplexes, and other types of structures. Once these properties become REO or bank owned, they will be listed as for sale, usually through listing providers or real estate brokers. Although you can choose from a wide selection of properties on a foreclosure listing, it is important to take note of the following guidelines to ensure your investment is adequately protected and remains an asset rather than a liability.

Always inspect the property

Property inspection is very important. Photos showing the front of a property or any of its angles will not be worth a close, personal inspection. The photos will not show leaks, broken tiles, broken windows, mold and other repairs that need to be made to the property. A licensed home inspector can help you assess the damage and condition of the property, as well as provide you with a written estimate for any repairs that need to be made to the property.

An eye inspection will not only give you a first-hand understanding of the current state of bank-owned foreclosures, it will also give you an idea of ​​the type of neighborhood that surrounds them. You can also ask the people in the neighborhood a few questions about their personal experiences living in the area and other questions that will give you a better idea of ​​what to expect. The information you will gather from a home visit will help you make your decisions later.

research the title

Once you’ve found a property that interests you, do a title search. You may want to search public records to see if there are any outstanding debts, liens, or judgments on the property. Any entry should give you an idea that the property may still have a money debt to satisfy. You don’t want to buy a property for which you would have to pay double what you would have paid for one with a good, clean title. If the property has outstanding taxes or liens on the property, you may need to pay them before you can get title.

negotiate with the bank

Although banks necessarily want as much of a property as possible to recoup any of their losses, they may still be open to negotiations, especially if the property in question has been on the market for too long. Banks are typically flexible when it comes to bank-owned foreclosures that need major repairs. If you are someone who can manage a top property for a fix up and remodeling project, whether for resale or rental, then negotiating with the bank can give you a favorable outcome.

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